Non-Solicitation Agreements in California: What You Need to Know

A non-solicitation agreement is a legal contract between an employer and employee that restricts the employee from soliciting the employer’s clients, customers, or other employees after leaving the company. This agreement is used to protect the employer’s business interests and prevent the employee from taking valuable information or clients to a competing business.

In California, non-solicitation agreements are subject to strict rules and regulations. The state has a strong public policy in favor of employee mobility and against the restriction of competition. As a result, non-solicitation agreements are narrowly construed and only enforceable under certain circumstances.

Here are the key things you need to know about non-solicitation agreements in California:

1. Non-Solicitation Agreements Must be Reasonable in Scope

Under California law, non-solicitation agreements must be reasonable in scope. This means that they cannot be overly broad and must be limited to protecting the employer’s legitimate business interests. For example, a non-solicitation agreement that prohibits an employee from contacting any client of the employer, regardless of whether the employee had a relationship with that client, would likely be considered overly broad and unenforceable.

2. Non-Solicitation Agreements Are Limited in Duration

Non-solicitation agreements in California are also limited in duration. They cannot be indefinite or extend beyond what is reasonably necessary to protect the employer’s legitimate business interests. Generally, non-solicitation agreements are limited to a period of one year or less.

3. Non-Solicitation Agreements Cannot be Used to Restrict Employee Mobility

California law prohibits employers from using non-solicitation agreements to restrict an employee’s mobility or ability to work in their chosen profession. This means that an employer cannot use a non-solicitation agreement to prevent an employee from seeking employment with a competing business.

4. Non-Solicitation Agreements Must be Supported by Adequate Consideration

To be enforceable, a non-solicitation agreement must be supported by adequate consideration. This means that the employer must provide something of value to the employee in exchange for their agreement to the terms of the non-solicitation agreement. Adequate consideration may include a promotion, raise, or access to confidential information.

5. Non-Solicitation Agreements Must be in Writing

Finally, non-solicitation agreements must be in writing and signed by both the employer and employee. Verbal agreements are not enforceable in California.

In conclusion, non-solicitation agreements in California are subject to strict rules and regulations. They must be reasonable in scope, limited in duration, cannot be used to restrict employee mobility, must be supported by adequate consideration, and must be in writing. If you are an employer considering implementing a non-solicitation agreement, it is important to consult with an experienced employment attorney to ensure that the agreement complies with California law.